The six billion dollar Fine

Islamabad 15th July: Top courts intervening in political and executive affairs is not a new practice in Pakistan; it dates back to the Maulvi Tameezuddin Case in 1950s when the country’s top court had validated the dismissal of the Constituent Assembly in a verdict considered a blow to democratic norms. But the term ‘judicial activism’ gained significant attention from 2007 onwards due to an extraordinarily active role of Justice Iftikhar Muhammad Chaudhary after his reinstatement as Chief Justice of Pakistan in the wake of a successful movement of lawyers – also supported by almost all political parties of the country – against the then military dictator, Pervez Musharraf.

The debate of judicial activism versus judicial restraint has once again come alive as an international arbitration tribunal has announced a huge award of $5.976 billion (equivalent to 944.21 billion rupees) against Pakistan in the Reko Diq case. The Inter¬national Centre for Settle¬ment of Investment Disp¬utes (ICSID) has fixed responsibility on Pakistan for termination of a contract between the Government of Balochistan and the Tethyan Copper Company (TCC). Under the contract, the TCC – a fully owned joint venture company of Barrick Gold of Canada and Antofagasta Minerals of Chile – was seeking to develop the Reko Diq copper-gold deposits in the Chaghai Hills of Balochistan province. The penalty slapped on Pakistan for termination of the contract – also including $1.87 billion in interest payment – is one of the biggest in the ICSID history.

The ruling by the ICSID – one of the five organisations of the World Bank Group – is not just one instance where a verdict by former top judge Iftikhar Muhammad Chaudhry has cost the country dear. Before that, in August 2017, the same ICSID tribunal had issued a $800 million award against Pakistan in a case filed by Turkish company Karkey. The top court, under Justice Iftikhar, had rendered a decision that the rental power generation contract between the Turkish company and the Government of Pakistan had been awarded in breach of the procurement rules and was thus void ab initio. The top court had ordered corruption investigation in the award of the contract. Of note in this context is yet another verdict by Justice Iftikhar. The former chief had annulled the sale of Pakistan Steel Mills in a judgement in 2006 that is widely believed to have severely damaged the process of privatisation in the country.

While in case of the latest penalty, Pakistan has reportedly decided to challenge the award ‘very soon’ by filing a revision application. While the application is likely to take two to three years to decide, it will serve as an opportunity for the two sides to go for an out-of-court settlement in which both sides appear interested.

It is in the fitness of things here to quote eminent Indian lawyer and constitutional expert Abdul Ghafoor Abdul Majeed Noorani, popularly known as AG Noorani: “Judicial activism is a virtue only when it is accompanied by restraint … Executive and legislative excesses can be cured by the courts. But who will cure judicial excess?”

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